This refers to the NRC inspection conducted
on August 6, 2002, at your facility located in Black Lick, Pennsylvania,
to review the activities authorized by your NRC license. During the inspection,
three apparent violations were identified involving: (1) the failure to
secure licensed material (well logging sources including one americium-241
source, approximately 3 curies; and one cesium-137 source, approximately
2 curies) when a logging truck in your parking lot containing the materials
was left unlocked with the keys left in the ignition; (2) the failure
to maintain a copy of the Operation and Emergency Procedures at a temporary
job site for several days during July 2002; and (3) the failure to perform
a periodic review of the radiation protection program. The apparent violations
were described in the NRC inspection report sent to you on September 12,
2002.

In the letter dated September 12, 2002,
transmitting the inspection report, the NRC provided you an opportunity
to either request a predecisional enforcement conference to discuss this
finding, or explain your position in a written response. In a telephone
conversation between Mr. Dan Coffee of your company and Ms.
Judith Joustra of NRC, Region I, on August 8, 2002, Mr. Coffee indicated
that Superior Well Services, Inc., declined the opportunity to discuss
this issue in a predecisional enforcement conference, but would submit
a written response to provide further perspective on the circumstances
involved with the apparent violations. In your written response, dated
September 27, 2002, you stated with respect to the security violation,
that you understood the need for security of radioactive materials and
that the apparent violation was caused by personnel oversight when the
keys were left in the truck. With regard to the second apparent violation,
you stated that the engineer who used one particular truck for a few days
in July 2002, carried the procedures in his briefcase, rather than in
the truck, when he performed work at temporary job sites. Based on this
additional information, we have determined that the second apparent violation
did not occur.

Based on the information developed during
the inspection, and the information provided by you in your September
27, 2002 letter, the NRC has determined that two violations of NRC requirements
occurred. The violations are cited in the enclosed Notice of Violation
(Notice) and the circumstances surrounding them are described in detail
in the subject inspection report. The more significant violation involved
the failure to maintain control of the logging sources stored inside the
truck when your employees left the truck unattended for a time period
up to three days with the keys in the ignition of the truck. Although
you stated that the truck was located in a fenced area, and a dispatcher/guard
had visual access to the gate and the truck, a violation occurred because
the dispatcher/guard did not maintain continuous monitoring of the truck
during the time it was unattended. While the radioactive sources were
in the source holders in the shielded condition and the source holders
were locked to the truck, this violation is of concern to the NRC because
the potential existed for the truck to be stolen, which in turn, could
result in substantial unintended radiation dose to an individual either
through removal of the sources from the shielded position or through damage
to the sources. Therefore, this violation is categorized at Severity Level
III in accordance with the "General Statement of Policy and Procedure
for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600.

In accordance with the Enforcement Policy,
a base civil penalty in the amount of $3,000 is considered for a Severity
Level III violation involving the loss of control of radioactive material
with this level of radioactivity. Because your facility has not been the
subject of escalated enforcement action within the last two years or two
inspections, the NRC considered whether credit was warranted for Corrective
Action in accordance with the civil penalty assessment process in
Section VI.C.2 of the Enforcement Policy. Credit for corrective actions
is warranted because your corrective actions were considered prompt and
comprehensive. These corrective actions included, but were not limited
to: (1) immediately securing the radioactive material by removing the
keys from the truck; (2) holding a safety meeting with all personnel to
inform them that the keys must be removed from the trucks while they are
parked in the parking area; and (3) using a sign-in/sign-out log
for the truck keys that will be monitored by management.

Therefore, to encourage prompt and comprehensive
correction of violations, I have been authorized, after consultation with
the Director, Office of Enforcement, to issue the enclosed Notice of Violation
for the Severity Level III violation with no civil penalty. However, you
should be aware that significant violations in the future could result
in a civil penalty. Further, since similar violations have been identified
during previous inspections of your licensed activities, you should provide
appropriate attention to ensure that your corrective actions to prevent
recurrence are effective and long lasting. In addition, issuance of this
Notice constitutes escalated enforcement action that may subject you to
increased inspection effort.

In addition, the violation regarding the
failure to perform a periodic review of your radiation protection program
was determined to be a Severity Level IV violation and is cited in the
attached Notice. Although you stated in your September 27, 2002 letter
that you contested the violation based on the fact that you periodically
discuss the radiation protection program during monthly meetings between
the RSO and the Safety & Health Director, you also stated that you
did not document these reviews as required by the NRC regulations. Because
these monthly meetings did not constitute a review of the program (i.e.,
a comparison of the program and its implementation with current regulatory
requirements), we have determined that the violation occurred as stated
in our September 12, 2002 letter. Your letter also listed the corrective
action taken for this violation; specifically, the RSO has subsequently
reviewed the radiation protection program, discussed the findings with
management, and documented the review in a written report.

The NRC has concluded that information regarding
your corrective actions taken and planned to correct the violations and
prevent recurrence have been described as documented in this letter. Therefore,
you are not required to respond to this letter unless the description
therein does not accurately reflect your corrective actions or your position.
In that case, or if you choose to provide additional information, you
should follow the instructions specified in the enclosed Notice. We appreciate
your cooperation with us in this matter.

In accordance with 10 CFR 2.790 of the NRC's
"Rules of Practice," a copy of this letter, its enclosures, and your response
(if you choose to provide one) will be made available electronically for
public inspection in the NRC Public Document Room or from the Publicly
Available Records (PARS) component of NRC's document system (ADAMS). ADAMS
is accessible from the NRC Web site at http://www.nrc.gov/NRC/reading-rm/adams.html
(the Public NRC Library).

Sincerely,

/RA/
James T. Wiggins Acting For

Hubert
J. Miller
Regional Administrator

Docket No. 03034542
License No. 37-30412-01

Enclosure: Notice of Violation

cc w/encl: Commonwealth of Pennsylvania

ENCLOSURE

NOTICE OF VIOLATION

Superior Well Services, Ltd.
Mays Landing, New Jersey

Docket No. 03034542
License No. 37-30412-01
EA 02-178

During an NRC inspection conducted on August
6, 2002, two violations of NRC requirements were identified. In accordance
with the "General Statement of Policy and Procedure for NRC Enforcement
Actions," (Enforcement Policy), NUREG-1600, the violations are set forth
below:

A.

10 CFR 20.1801 requires
that the licensee secure from unauthorized removal or access licensed
materials that are stored in controlled or unrestricted areas. 10
CFR 20.1802 requires that the licensee control and maintain constant
surveillance of licensed material that is in a controlled or unrestricted
area and that is not in storage. As defined in 10 CFR 20.1003,
controlled area means an area, outside of a restricted area
but inside the site boundary, access to which can be limited by the
licensee for any reason; and unrestricted area means an area,
access to which is neither limited nor controlled by the licensee.

Contrary to the above, the licensee failed to secure from unauthorized
removal or access licensed materials that were stored in a controlled
area. Specifically, the licensee did not maintain control of well
logging sources, an americium-241 source (approximately 3 curies)
and a cesium-137 source (approximately 2 curies), stored inside a
truck when the licensee left the truck unattended for a time period
up to three days with the keys in the ignition of the truck. Although
the truck was located in a fenced area, and a dispatcher/guard had
visual access to the gate and the truck, the dispatcher/guard did
not maintain continuous monitoring of the truck during the time it
was unattended.

Contrary to the above, for the period from November 1997 through August
2002, the licensee did not periodically (at least annually) review
the radiation protection program content and implementation. Specifically,
the licensee did not perform periodic reviews, other than discussions
of the radiation protection program at monthly meetings.

This is a Severity Level IV violation (Supplement IV)

The NRC has concluded that information regarding
the reason for the violations, and the corrective actions taken and planned
to correct the violations and prevent recurrence are already adequately
addressed on the docket in the NRC letter transmitting this Notice. Therefore,
no response to this Notice is required. However, you are required to submit
a written statement or explanation pursuant to 10 CFR 2.201
if the description therein does not accurately reflect your corrective
actions or your position. In that case, or if you choose to respond, clearly
mark your response as a "Reply to a Notice of Violation," and send it
to the U.S. Nuclear Regulatory Commission, ATTN: Document Control
Desk, Washington, DC 20555 with a copy to the Regional Administrator,
Region I, within 30 days of the date of the letter transmitting this Notice
of Violation (Notice).

If you contest this enforcement action,
you should also provide a copy of your response, with the basis for your
denial, to the Director, Office of Enforcement, United States Nuclear
Regulatory Commission, Washington, DC 20555.

If you choose to respond, your response
will be placed in the NRC Public Document Room (PDR). Therefore, to the
extent possible, the response should not include any personal privacy
or proprietary information so that it can be placed in the PDR without
redaction. ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams/index.html
(the Public NRC Library).

In accordance with 10 CFR 19.11, you may
be required to post this Notice within two working days.